Retail and tourism haven't made my shopping list for a while now but when a hound with an acute sense of smell starts baying at the scent, it's time to don the reading glasses and pull out the abacus.
After reading the most recent annual and interim report, the associated presentations and a full catalogue of market updates and other notices I decided it's time to head to the local wine shop to clear my head and ponder a few pre-prandial takeaways:
1. over the last 12 months WHS had generated a lot of cash (enough to repay the bonds which matured this month) by essentially leaning on their suppliers – the payables have gone up a lot – and I have to wonder if that is going to reverse itself at some stage
2. they have operations in a number of overseas countries, some of which have been hard hit by the virus, and in spite of a number of statements about supply chains I'm still unclear on whether supplies have been affected – either in terms of getting goods on to the shelves in NZ and the cost of doing so and, if so, by how much
3. if there is any guidance on the costs of right-sizeing the business they were well hidden – I'm expecting some non-recurring expenses in the second half of the year but will need to consult my Magic-8 Ball to know how material these will be. At some stage I should go back further and see if these sorts of "non-recurring" items have a habit of recurring
4. in spite of WHS releasing at least 5 trading updates (or similar) post cancellation of the interim dividend, my NZ broker has not released an updated research report since mid-March. This suggests that they may also be having difficulty getting their heads around these issues. And, yes, I appreciate that at this time forecasts of any kind involve even more guesswork than usual
5. the balance sheet looks quite strong, so much so that I would be astonished if the directors felt the need to do one of those value destructive placings that seem to be all the rage at the moment